Transit-Oriented and Joint Development: Case Studies and Legal Issues (2011)

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6 With respect to infrastructure: “Before private capital will come to depressed urban districts, substantial improvements are often necessary not only to enhance a neighborhood’s appearance and capacity for growth but also to demonstrate a bona fide public commitment to turning an area around.”21 New drainage, water systems, underground utility placement, parkland, pathways, landscaping, and street-lighting upgrades have all attracted private investments in the TODs. Other important approaches for government to encourage TOD include streamlining development review, remediation of brownfields, resource sharing, siting of government facilities, and transportation demand management.22 Developing Around Transit: Strategies and Solutions that Work is published by the Urban Land Institute (ULI), which is targeted towards making development work.23 The final chapter of the book expands on a 2003 ULI publication called Ten Principles for Successful Development Around Transit, which includes: 1. Make it better with a vision. 2. Apply the power of partnerships. 3. Think development when thinking about transit. 4. Get the parking right. 5. Build a place, not a project. 6. Make retail development market driven, not tran- sit driven. 7. Mix uses, but not necessarily in the same place. 8. Make buses a great idea. 9. Encourage every price point to live around transit. 10. Engage corporate attention. 24 The publication of Transit Oriented Development: Making It Happen provided a theoretical departure from many of the previous books, which have sought to justify the benefits and importance of TOD, towards a discussion of best practice examples in implementing TOD. The chapters, written by academic and profes- sionals across Australia, Asia, Europe, and North America, address implementation tools and processes, along with the role of the local community and markets in implementing TOD.25 Marilee Utter notes in Chapter 16, “Developing TOD in America: The Private Sector View,” “Despite much excitement for TOD, the market reality is that TOD is just beginning to gather momentum. … While the pub- lic sector has made major investments in transit sys- tems and station area plans, it actually falls to private 21 Id. at 60 (emphasis in original). 22 Id. at 61–64. 23 ROBERT DUNPHY ET AL., URBAN LAND INSTITUTE, DEVELOPING AROUND TRANSIT: STRATEGIES AND SOLUTIONS THAT WORK (2004). 24 ROBERT DUNPHY, DEBORAH MYERSON & MICHAEL PAWLUKIEWICZ, URBAN LAND INSTITUTE, TEN PRINCIPLES FOR SUCCESSFUL DEVELOPMENT AROUND TRANSIT (2003). 25 TRANSIT ORIENTED DEVELOPMENT: MAKING IT HAPPEN (CAREY CURTIS, JOHN RENNE & LUCA BERTOLINI Eds.) (2009). sector developers to implement and build these vibrant districts.”26 D. TCRP LRD 12 Set in the context of these emerging policy and mar- ket trends, TCRP LRD 12 (The Zoning and Real Estate Implications of Transit-Oriented Development) explores the local zoning controls used to encourage transit- oriented development and presents an analysis of legal issues associated with TOD. The report begins with a short outline of the primary development issues ad- dressed by TOD-based zoning codes, with sections on distance from transit stations; density and use regula- tions; bulk, setback, and area controls; urban form; street patterns; and parking restrictions. The report’s central section presents the results of a national survey of 300 transit agencies that assessed the level of agency participation with TOD and TJD activities. The survey results showed that only a handful of agencies in the United States were involved in TOD projects. Those that were involved tended to focus on zoning controls to foster higher density, mixed-use, and transit-supportive land uses. A few agencies employed other techniques such as density bonuses, impact fees, and density- transfer mechanisms. The survey also revealed that there had not, as of that time, been any instances of litigation over TOD-related issues. TCRP LRD 12 con- cludes with an outline of the legal bases for TOD zon- ing, with a general discussion of legal issues related to local planning and zoning. III. STATUTORY/REGULATORY LAWS This section provides summary descriptions of statu- tory and regulatory programs adopted by federal, state, and regional governments to facilitate or promote TOD, TJD, and other related development types. Although the section focuses on programs initiated since TCRP LRD 12 (1999), several other longer-standing programs are also covered. Generally, the programs fall into three basic types: those that either encourage or require planning or zoning for TOD and joint development, those that provide funding for TOD-related infrastruc- ture or housing, and those that provide basic legal au- thority to transit agencies to engage in TOD/joint devel- opment activities.27 A. Planning for TOD and Joint Development A growing number of statutes and administrative programs provide direction, guidance, and technical and financial support for local efforts aimed at creating TOD and joint development general-plan policies and implementing regulations. While some programs are directive and mandatory, most are voluntary and incen- tive based. 26 Id. at 209. 27 App. A provides a list of all statutory and regulatory pro- grams discussed in this section. App. B provides a Model Bylaw Transit-Oriented Development Overlay District.

7 1. Federal New Starts Criteria for Capital Transit Projects Undoubtedly, the most important program in this area is the federal New Starts major capital investment program administered by the Federal Transit Admini- stration (FTA). Prior to the passage of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA),28 New Starts funding applications were as- sessed using only very narrow measures of ridership, efficiency, and energy savings.29 Factors such as land use and economic development—which are now ac- knowledged as instrumental to the success of transit investments30—were not considered, at least directly. ISTEA, for the first time, introduced the notion that “transit supportive existing land use policies and future patterns” should be considered in assessing New Starts applications.31 FTA implemented this language through its 1996 Federal Register notice on New Starts criteria, where the agency indicated that it intended to rate pro- jects on a three-point scale (low, medium, high) accord- ing to “existing land use, containment of sprawl, transit supportive corridor policies, supportive zoning regula- tions near transit stations, tools to implement land use policies, and the performance of land use policies.”32 ISTEA’s successor, the Transportation Equity Act for the 21st Century (TEA-21),33 readopted the prior lan- guage on transit-supportive land use and added consid- eration of “cost of urban sprawl” and possible “reduc- tions in local infrastructure costs achieved through compact land use development.”34 In its subsequent im- plementing regulations, adopted in 2000, FTA elabo- rated on the statutory criteria, indicating that it in- tended to “evaluate existing conditions in the corridor and the degree to which local land use policies are likely to foster transit supportive land use, measured in terms of the kinds of policies in place, and the commitment to these policies.”35 In making this evaluation, FTA an- nounced the following factors as important: existing land use, likely impact of transit on future land use, 28 Pub. L. No. 102-240, 150 Stat. 1914 (1991). 29 G.B. ARRINGTON, LIGHT RAIL AND THE AMERICAN CITY: STATE-OF-THE-PRACTICE FOR TRANSIT-ORIENTED DEVELOPMENT, IN TRANSPORTATION RESEARCH CIRCULAR E-C058: EXPERIENCE ECONOMICS AND EVOLUTION FROM STARTER LINES TO GROWING SYSTEMS, 9th National Light Rail Transit Conference 189 (2003), http://www.drcog.org/documents/LRT%20and%20TOD. pdf. 30 See, e.g., ROBERT CERVERO, THE TRANSIT METROPOLIS: A GLOBAL INQUIRY (1998). 31 ISTEA, Pub. L. No. 102-240, § 3010, 105 Stat. 1914, 2093 (1991). 32 Sec. 5309 (§ 3(j)), FTA New Starts Criteria, 61 Fed. Reg. 67093, 67106 (Dec. 19, 1996). 33 Pub. L. No. 105-178, 112 Stat. 107 (1998). 34 Id. § 3009; 112 Stat. at 353. 35 49 C.F.R. pt. 611, App. A. (2009). The 2000 administrative rule also replaced the three-tier rating system (low, medium, high) with a five-tier system (high, medium-high, medium, low- medium, low). 49 C.F.R. § 611.9(a)(4) (2009). growth management policies, transit-supportive policies and zoning regulations, implementation tools, and ex- isting and planned pedestrian facilities.36 The impact of the land-use criterion in the New Starts approval process has been significant; in some cases, high scores on the land-use criterion have led to the approval of projects that scored low on other crite- ria, including those related to cost-effectiveness.37 Con- gressional concern over these outcomes, expressed in the fiscal year (FY) 2005 Appropriations Bill Conference Report,38 led to an informal declaration by FTA that it would effectively limit the effect of the land-use factor to counter-balance poor performance on other New Starts criteria.39 Nevertheless, in the 2005 Act that replaced TEA- 21—the Safe, Accountable, Flexible, Efficient Transpor- tation Equity Act: A Legacy for Users (SAFETEA-LU)— Congress not only retained the “supportive land use policies and future patterns” language from the earlier acts, but upgraded it from a mere “consideration” to a “justification factor” and added economic development as a distinct, new criterion.40 In its 2007 draft revision to the New Starts administrative rule, FTA proposed combining the economic development and land-use fac- tors into a single effectiveness criterion that would as- sess a proposed New Starts capital project for its likely impact in promoting the construction of TOD.41 Con- 36 Id. 37 U.S. CONGRESS, HOUSE COMMITTEE ON APPROPRIATIONS, DEPARTMENTS OF TRANSPORTATION & TREASURY & INDEPENDENT AGENCIES APPROPRIATIONS BILL, 2005, H.R. REP. NO. 108-671, at 91. 38 Id. (The IG has found that in some cases, even if a project has re- ceived a low cost-effectiveness rating, a high land use rating could result in a total project rating of medium. Therefore, FTA may be promoting projects where the cost effectiveness does not support continuation of the project, yet possible development opportunities around the project may allow it to continue for- ward.). 39 “Dear Colleague” Letter from Jennifer L. Dorn (Mar. 9, 2005), http://www.fta.dot.gov/documents/DC3-9-05.pdf. 40 Pub. L. No. 109-59, § 3011, 119 Stat. 1144, 1575 (2005), codified at 49 U.S.C. § 5309(d)(2)(B) (2007). 41 Department of Transportation, Federal Transit Administration, Major Capital Investments Projects, Part III, 72 Fed. Reg. 43328, 43354 (Aug. 3, 2007). Under the proposed rule, this combined criterion would receive 40 percent of the weight of the “effectiveness measure,” which would be weighed equally with a measure of cost effectiveness. Id. The agency’s position that economic development and land use factors should be combined was supported by a panel of experts convened to articulate reasonable research methods into TOD impacts of transit. Measuring the Economic Development Benefits of Transit Projects: Proceedings of an Expert Panel Workshop 1, prepared by Cambridge Systematics, Inc., for FTA Office of Planning and Environment (Mar. 2008) (“Panelists noted that economic development and land use are closely related and difficult to evaluate separately, and suggested that economic development includes land use changes that generate economic value.”). Although Congress put final adoption of the proposed new rules on hold, Pub. L. No. 110-161, Div. K, Tit. I,

8 gressional and transit industry dissatisfaction with the draft rule, however, led to a postponement of rule final adoption.42 With the expiration of SAFETEA-LU in 2009, it seems unlikely that adoption of any new or amended administrative rule will occur until after the passage of new transportation legislation. Given the stalling of the proposed new rule, FTA’s current practice is to assign land-use factors 50 percent of the weight in project justification analyses.43 As might be expected, such heavy weighting of TOD- related development and policy has had a positive in- fluence on the propagation of TOD planning and zoning at the local government level.44 In her 2002 survey of 21 transit agencies, Elizabeth Deakin et al. observed that “[v]irtually all agencies responded that they give high priority to projects serving…areas with land uses in place or planned that support transit use.”45 In some cases, agencies conditioned transit expansions on the existence of supportive existing land uses or planning and zoning for future TOD.46 2. State Laws and Programs While much of the TOD literature highlights the roles that local and regional agencies have in facilitat- § 170, 121 Stat. 2401, Dec. 26, 2007, FTA is currently conducting further research into methods for measuring the combined economic development/land use criterion, with a particular focus on hedonic land price and interactive land use- transportation models, Federal Transit Administration, Discussion Paper on the Evaluation of Economic Development 1 (2009), http://www.fta.dot.gov/documents/Econ_Dev_ Discussion_Paper_1-16-09_Final.pdf, 2009 Additional Proposed Guidance on New Starts/Small Starts Policies and Procedures, available at http://www.fta.dot.gov/planning/ newstarts/planning_environment_10278.html. 42 Pub. L. No. 110-161, Div. K, Tit. I, § 170, 121 Stat. 2401 (2007). 43 U.S. GOV’T ACCOUNTABILITY OFFICE, PUBLIC TRANSPORTATION: IMPROVEMENTS ARE NEEDED TO MORE FULLY ASSESS PREDICTED IMPACTS OF NEW STARTS PROJECTS 14 (2008), http://www.gao.gov/new.items/d08844.pdf; FED. TRANSIT ADMIN., ANNUAL REPORT ON FUNDING RECOMMENDATIONS: PROPOSED ALLOCATIONS OF FUNDS FOR FISCAL YEAR 2009 B-10 (2008), available at http://www.fta.dot.gov/regional_offices_7753.html. 44 G.B. ARRINGTON, supra note 29, at 191, http://www.drcog.org/documents/LRT%20and%20TOD.pdf; CAMBRIDGE SYSTEMATICS, SUMMARY ANALYSIS OF TRANSIT SUPPORTIVE LAND USE FOR NEW STARTS PROJECTS: FY 2003 ANNUAL REPORT ON NEW STARTS (2002), available through TRIS database, http://tris.trb.org/view.aspx?. 45 Elizabeth Deakin, Christopher Ferrell, Jonathan Mason & John Thomas, Policy and Practices for Cost-Effective Transit Investments: Recent Experiences in the United States, 1799 TRANSP. RES. REC. 1, 7 (2002). 46 Id.; LEVINE, supra note 14, at 15 (“the Bay Area Rapid Transit (BART) District considers the willingness of a municipality to accept higher-density, transit-oriented development near proposed station sites in determining routing and location of new service extensions”). ing the construction of TOD,47 significant policy devel- opments have been occurring at the state level. As Renne identifies, state-level policy on TOD can play an important role in financing strategic and station- area planning, infrastructure, and streetscape improve- ments. Other roles for state government include promot- ing regional planning and coordination across state agen- cies, setting goals to facilitate tax savings, encouraging environmental stewardship, creating funding programs and incentives, reducing regulatory and statutory barri- ers to land use, promoting public–private partnerships, and establishing pilot programs.48 One of the earliest state-level TOD policies in the United States is California’s Transit Village Develop- ment Planning Act of 1994,49 which establishes a plan- ning goal for local, regional, and state agencies to direct new development into transit station areas50 and au- thorizes cities and counties to adopt transit village de- velopment districts meeting certain specified land-use and transit operational standards.51 Local governments that implement such districts may grant density bo- nuses of up to 25 percent to development projects meet- ing certain standards52 and may become eligible for spe- cial state funds allocated for transportation improvements in transit village districts.53 Once a local government adopts a transit village district, only public works projects, subdivision and parcel maps, and zon- ing ordinance amendments that are consistent with the district may be approved.54 Although tax-increment fi- nancing and land-assemblage authority were included in the original version of the Act, these powers were excised from the legislation before final passage.55 Insuf- ficient state funding has reportedly hampered the Act’s impacts on local TOD planning and zoning.56 The California Jobs-Housing Balance Improvement Program was created by the state legislature in 2000 to encourage the housing development of areas experienc- 47 E.g., CERVERO ET AL., supra note 4; DITTMAR & OHLAND, supra note 8. 48 John Renne, Smart Growth and Transit-Oriented Development at the State Level: Lessons from California, New Jersey, and Western Australia, 11 J. PUB. TRANSP. 77, 83 (2008). The American Association of State Highway and Transportation Officials (AASHTO) also reports significant involvement in TOD policy and development by departments of transportation in more than a dozen states nationally. CAMBRIDGE SYSTEMATICS, THE ROLE OF STATE DOTS IN SUPPORT OF TRANSIT-ORIENTED DEVELOPMENT (2006), http://www.trb.org/NotesDocs/25-25(20)_FR.pdf. 49 CAL. GOV’T CODE § 65460 (Deering 2008). 50 Id. § 65460.3. 51 Id. §§ 65460.2, 65460.4. 52 Id. § 65460.2(g). 53 Id. § 65460.5(a). 54 Id. § 65460.9. 55 Renne, supra note 48, at 86. 56 Id.; ROBERT CERVERO, TRANSIT VILLAGES IN CALIFORNIA: PROGRESS, PROSPECTS, AND POLICY REFORMS 9 (1998), http://iurd.berkeley.edu/sites/default/files/wp1/98-08.pdf; CERVERO ET AL., supra note 4, at 47–48.

9 ing large increases in job growth and job development in areas lacking sufficient employment.57 While broadly targeted to areas of the state experiencing jobs–housing imbalances, the program is also motivated by a desire to encourage the location of mixed-use development in transit station areas.58 The legislation provided funding to the state’s Department of Housing and Community Development for two purposes: the creation of an incen- tive-based grant program to fund local government pub- lic facilities and services and an infusion of funds for the state’s revolving fund that provides predevelopment loans for affordable housing.59 The first of these initiatives, the California Jobs- Housing Balance Incentive Grant Program, provided $25 million60 in one-time funding to local governments for the construction of public facilities and services. Local jurisdictions competed for the funds by demon- strating compliance with state housing planning re- quirements and posting at least a 12 percent increase in housing permit levels during 2001 above the average annual rate of the 3 previous years.61 The amount of funding provided to a jurisdiction was a function of the number of units permitted and the jurisdiction’s degree of housing versus jobs imbalance.62 Though the program was primarily aimed at overcoming “fiscalized zoning” and NIMBY-based resistance to permitting new hous- ing, additional grant monies were provided to further incentivize the permitting of multifamily, affordable, and infill housing.63 The program succeeded in helping to increase local government compliance with the state housing planning laws (up from 68 percent in 2001 to 78 percent in 2006),64 and in increasing the amount of housing in areas deemed to be housing-poor. Of particu- lar note was the program’s effect on the stock of multi- family housing, which increased by 128 percent in par- ticipating jurisdictions, compared to a 50 percent increase in single-family housing.65 The program, de- signed to provide one-time funding, is now completed; 57 CAL. HEALTH & SAFETY CODE § 50542 (Deering 2008). 58 Id. § 50541(i). 59 Id. § 50542.1(a). A third element of the Program would have provided funds to local agencies for the purpose of attracting employment to “housing rich” communities. Id. § 50543. That provision, however, was made inoperative by subsequent legislation. Stats. 2000, chap. 665 § 8. 60 While the program was initially allocated $110 million, subsequent legislation rescinded the funding commitment. CALIFORNIA DEPT. OF HOUSING AND COMMUNITY DEVELOPMENT, CALIFORNIA’S JOB-HOUSING BALANCE INCENTIVE GRANT PROGRAM: FINAL REPORT TO THE LEGISLATURE 3 (n.d.). The program’s funding was restored, albeit at a lower level, through voter initiative. CAL. HEALTH & SAFETY CODE § 53533(a)(8) (Deering 2008). 61 CALIFORNIA DEPT. OF HOUSING AND COMMUNITY DEVELOPMENT, supra note 60, at 5. 62 Id. 63 Id. at 3. 64 Id. at 10. 65 Id. at 7. however, elements of the program have been continued through the state’s Workforce Housing Reward Pro- gram.66 New Jersey was arguably the originator of the TOD concept, at least in a suburban context, with the con- struction of Llewellyn Park in 1857 along a railroad extension from New York City.67 Railroad suburbs grew rapidly in the state throughout the second half of the 19th century and the first half of the 20th.68 New Jer- sey’s Transit Village Initiative is a partnership formed by the New Jersey Department of Transportation and New Jersey Transit that provides incentives to local governments for redeveloping and revitalizing areas around transit facilities. Incentives include preferential access to state grants and technical assistance from a task force that includes representatives from state envi- ronmental, planning, economic development, housing, and transportation agencies.69 To qualify, local govern- ments demonstrate a commitment for future housing, employment, and population growth; have a rail, light rail, ferry, or bus transfer station; and have vacant or underutilized land within walking distance of that sta- tion. The local government must also have an adopted TOD redevelopment plan or zoning ordinance that con- tains transit-supportive land-use designations, densi- ties, site and architectural design guidelines, and park- ing regulations.70 Since the program’s inception in 1999, 19 transit villages have been designated.71 A 2005 evaluation of 16 villages showed that in the program’s first 5 years, more than 800 new housing units worth $191 million and more than $330 million in nonresiden- tial development had been built in the villages.72 Connecticut’s Transit-Oriented Development Pilot Program, adopted by the state legislature in 2007, au- thorizes the State Bond Commission to issue up to $5 million in bonds to support the creation of a TOD pro- gram in the state’s department of transportation.73 The target of the program is to promote TOD planning and zoning initiatives in four rail and bus rapid-transit cor- ridors in the state. Qualifying local governments may 66 CAL. HEALTH & SAFETY CODE § 50550 (Deering 2008). 67 JAMES HOWARD KUNSTLER, GEOGRAPHY OF NOWHERE 46– 49 (1993). 68 Renne, supra note 48, at 95. 69 New Jersey Department of Transportation, Transit Village Initiative Web site: Frequently Asked Questions (2009), http://www.state.nj.us/transportation/community/village/faq. shtm. 70 New Jersey Department of Transportation, 2009 Transit Village Criteria & Scoring Guide 1–2, http://www.nj.gov/ transportation/community/village/pdf/2009guide.pdf. 71 New Jersey Department of Transportation, Transit Village Initiative Web site: Frequently Asked Questions (2009), http://www.state.nj.us/transportation/community/village/faq.shtm. 72 JAN S. WELLS & STEPHAN J. SCHMIDT, TRANSIT VILLAGE MONITORING RESEARCH: BUILDING PERMIT DATA: 1999–2004 3 (2005), http://policy.rutgers.edu/vtc/tod/documents/ Building_Permits.pdf. 73 CONN. GEN. STAT. § 13b-79ll(a) (2008).

10 use program funds for the development of TOD devel- opment plans, overlay zones, market and financial analyses, and implementation activities, including brownfield remediation planning and the preparation of joint development agreements.74 The program comple- ments a 2005 state requirement that regional planning agencies identify potential TOD sites within their juris- dictions.75 Although not specifically designated as a TOD provi- sion, Florida’s concurrency requirement—specifically the provisions allowing for transportation exceptions to the concurrency—effectively promotes TOD planning and zoning. Part of Florida’s growth management sys- tem, concurrency requires that, as a condition of ap- proval for new development, adequate public facilities and services be available concurrent with the impacts of the development.76 With respect to transportation ca- pacity, “facilities needed to serve new development shall be in place or under actual construction within 3 years after the local government approves a building permit or its functional equivalent that results in traffic gen- eration.”77 In response to concerns that application of this requirement might inhibit infill and redevelopment in urbanized areas, in 2005 the state legislature created an exception to the transportation concurrency re- quirement for developments that, among other objec- tives, promote public transit ridership.78 To qualify an area for the exception, local governments must include in their planning documents TOD-style provisions that address “urban design; appropriate land use mixes, in- cluding intensity and density; and network connectivity plans needed to promote urban infill, redevelopment, or downtown revitalization.”79 The agency in charge of im- plementing the provision, the Department of Commu- nity Affairs, has developed criteria for exception ap- provals that set minimum standards for features typically addressed in TOD planning, including density, diversity, and design.80 3. Regional Laws and Programs As indicated above, much of the existing TOD litera- ture covers local and regional policy initiatives.81 The 74 Id. § 13b-79ll(f). 75 Anika Singh Lemar, Transit-Oriented Development: Land Use Planning Responds to Climate Change, Sustainable Developments: Climate Change and Sustainable Development Practice Group 3 (2008), http://www.wiggin.com/files/ CCSDnewsletter_Land%20Use%20Planning%20Lemar%2012. 08.pdf. 76 FLA. STAT. § 163.3180(2) (2009). 77 Id. § 163.3180(2)(c). 78 Id. § 163.3180(5)(a). 79 Id. § 163.3180(5)(e). 80 FLORIDA DEPARTMENT OF COMMUNITY AFFAIRS, A GUIDE FOR THE CREATION AND EVALUATION OF TRANSPORTATION CONCURRENCY EXCEPTION AREAS 21–24 (2007), http:// www.dca.state.fl.us/fdcp/dcp/transportation/Files/ AGuideCreationEvaluationTCEAs.pdf. 81 See Renne, supra note 48, at 83. objective here is not to recreate that literature, but to focus on a few examples that represent the range of policy options. a. Regional Planning & Zoning Policies.—The Livable Centers Initiative (LCI) is a competitive planning grant program administered by the Atlanta Regional Council (ARC) to encourage local jurisdictions to plan and implement strategies linking transportation with land use to support and create sustainable communities. Though not targeted exclusively at TOD, the program’s goals are consistent with TOD outcomes: to encourage a diversity of mixed-income residential neighborhoods, employment, shopping and recreation choices at the activity center, town center, and corridor level; provide access to a range of travel options including transit, roadways, walking and biking to enable access to all uses within the study area; develop an outreach proc- ess that promotes the involvement of all stakeholders.82 Using $10 million in Federal Surface Transportation Program dollars, the LCI program has funded 86 plan- ning studies for four development types in the Atlanta region: town centers, activity centers, corridors, and emerging regional centers.83 Planning grants are awarded according to an application’s consistency with the policies of ARC’s Regional Development Plan “to encourage activity and town center development.”84 Transportation projects identified in the planning stud- ies are then eligible for special funding through the region’s long-range transportation plan and transporta- tion improvement program. Selection of these projects for funding hinges on the applicant community’s pro- gress in implementing zoning amendments identified in the LCI planning study and the project’s role in sup- porting a mixture of transportation modes.85 Funding for supplemental planning studies is also available for those communities that show a strong level of commit- ment to implementation of policies developed through the planning process.86 To date, more than $500 million has been allocated for the program.87 In 2004, three LCI study area plans were evaluated for their likely impacts on travel and air quality indices. The analysis showed that, compared to trend develop- ment assumptions, the LCI plans for the three areas would reduce vehicle miles traveled, vehicle trips, and emissions of air pollutants (including CO2) by 5 percent, 82 Atlanta Regional Council, Livable Centers Initiative (LCI) Web site (2009), http://www.atlantaregional.com/html/308.aspx. 83 ATLANTA REGIONAL COUNCIL, 2007 LCI IMPLEMENTATION REPORT A-3, A-5 (2007); Atlanta Regional Council, LCI Recipients Web site, http://www.atlantaregional.com/html/323.aspx. 84 Id. at A-4. 85 Id. at A-7. 86 Id. 87 Atlanta Regional Council, LCI Implementation Web site, http://www.atlantaregional.com/html/324.aspx.

11 10 percent, and 24 percent, respectively.88 A 2007 evaluation of the program showed that more than 63,000 units of housing, nearly 12 million square ft of commercial, and more than 40 million square ft of office development had occurred in the LCI study areas since the program’s inception.89 The LCI program received national recognition by the U.S. Environmental Protec- tion Agency (EPA) in 2008.90 Similar to the LCI, the Metropolitan Transportation Commission (MTC) in the San Francisco Bay Area uses federal transportation dollars (Enhancement, Conges- tion Management Air Quality, and Surface Transporta- tion Program funds) to support community-based plan- ning and resulting transportation projects through its Transportation for Livable Communities (TLC) pro- gram. Proposals for planning and capital funding are assessed using the program’s five main principles: maximize community and stakeholder involvement, integrate transportation and land use, provide trans- portation choices and linkages, encourage compact de- velopment, and support neighborhood revitalization and placemaking.91 Between the program’s launch in 1998 and 2005, MTC issued more than $2.5 million in planning grants and nearly $83 million in capital grants. In addition to planning and capital grants, the TLC program contains a Housing Incentive Program (HIP). Through this unique program, MTC provides federal transportation funding to communities that successfully promote high-density housing and mixed-use develop- ments in transit station areas.92 Because of regulatory restrictions, use of the funds is limited to transporta- tion-related projects. However, the local government is free to use the funds anywhere within its jurisdiction. In its first funding cycle (2001), MTC provided $9 mil- lion in HIP funding to local governments. 93 In 2005, HIP grants totaled more than $30 million.94 88 SMARTRAQ, BEFORE AND AFTER STUDY: LIVABLE CENTERS INITIATIVE (LCI) III-10–11, IV-14–15, V-11 (2004), http://www.act-trans.ubc.ca/smartraq/files/GRTA_LCI_III _1234_2.pdf. 89 ATLANTA REGIONAL COUNCIL, supra note 83, at 5, link available at http://www.atlantaregional.com/land-use/livable- centers-initiative/evaluation/lci-evaluation-1. 90 U.S. ENVIRONMENTAL PROTECTION AGENCY, 2008 NATIONAL AWARD FOR SMART GROWTH ACHIEVEMENT 9–10 (2008), http://www.epa.gov/smartgrowth/awards/sg_awards_publicatio n_2008.htm. 91 METROPOLITAN TRANSPORTATION COMMISSION, TRANSPORTATION FOR LIVABLE COMMUNITIES: WORKS IN PROGRESS 9 (2004), http://www.mtc.ca.gov/library/TLC/TLC- Works_In_Progress.pdf. 92 Id. at 4–5. 93 Id. at 7. 94 Metropolitan Transportation Commission, Resolution 3710: FY 2004–05 Housing Incentive Program (adopted June 22, 2005), http://www.mtc.ca.gov/planning/smart_growth/hip.htm. The TLC program complements MTC’s 2005 Transit- Oriented Development Policy for Regional Transit Ex- pansion Projects (Resolution 3434). In a manner consis- tent with the land use components of the Federal New Starts criteria, Resolution 3434 provides at the regional level a tie between transit capital funding and local land-use conditions and policies. Specifically, the Reso- lution prohibits funding for the capital construction costs of specified extensions to the region’s ferry and rail transit services until the relevant local govern- ments have adopted transit-supportive station area plans.95 To evaluate the sufficiency of station area plans, the Resolution classifies the planned extensions by whether existing or planned housing densities within a 0.5 mi radius of the future stations meet speci- fied threshold levels. For those projects not meeting the threshold, MTC will not fund construction of the exten- sion until the local government adopts planning amendments that will bring planned density levels up to the threshold. MTC anticipates that this will lead ultimately to the construction of an additional 42,000 units of transit-oriented housing. In addition to density levels, the Resolution requires station area plans to address pedestrian-friendly design standards, local cir- culation, and TOD-supportive parking policies. A 2006 analysis of development capacities and market condi- tions along those transit extensions not currently meet- ing the policy’s threshold levels indicates that the thresholds can be met with appropriate planning initia- tives.96 The Indirect Source Review system of the San Joa- quin Valley Air Pollution Control District in the Fresno, California, region imposes an impact fee on new land- use development to help mitigate transportation-related air pollutants (NOx and PM10) associated with the new development and to encourage developers to create pro- jects that minimize emissions.97 The program, which applies to all development types over a minimum base level, assesses fees for the estimated 10-year total emis- sions associated with the development. The fees, which are currently set at $9,350 per ton for NOx and $9,011 per ton for PM10, are calculated by estimating the cost of offsetting emission reduction strategies.98 The incentive part of the program provides fee re- ductions for incorporating features into the project that will reduce transportation-related emission rates below base levels. These features, which reflect many TOD- 95 Metropolitan Transportation Commission, MTC Resolution 3434: Transit-Oriented Development (TOD) Policy for Region Transit Expansion Projects (adopted July 27, 2005), http://www.mtc.ca.gov/planning/smart_growth/tod/TOD_policy. pdf. 96 Nelson\Nygaard, MTC’s Resolution 3434: Transit Oriented Development Policy 3-2 (2006), http://www.mtc. ca.gov/planning/smart_growth/tod/TOD_Policy_Evaluation. pdf. 97 San Joaquin Valley Air Pollution Control District, Rule 9510: Indirect Source Review (adopted Dec. 15, 2005), http://www.valleyair.org/rules/currntrules/r9510.pdf. 98 Id. at 15.

12 related planning objectives, include proximity to retail; a balanced jobs-to-housing ratio; proximity to transit services and facilities; intersection density; and the provision of sidewalks, bicycle lanes, and long-term bi- cycle parking.99 In 2006–2007, the district collected nearly $13 million in fees and spent more than $9.5 million on emission reduction projects. These projects resulted in emission reductions of 824.07 tons of NOx and 33.71 tons of PM10.100 b. Regional Visioning and Planning.—As was noted in a recent edition of the Journal of the American Plan- ning Association: Regional planning in the United States is back. A com- mon subject among practitioners and policymakers in the 1970s, regional planning suffered a major contraction during the new federalism of the Reagan era. However, by [1990], U.S. metropolitan regions had started seeking visions of their own. Over the course of the next decade and a half, planners and citizens increasingly articulated priorities and values to help shape the futures of their metropolitan regions.101 The article goes on to chart more than 80 regional visioning and planning studies completed between 1989 and 2003. Although most of these planning processes were motivated solely by the initiative of the sponsoring planning agency,102 several state policies and programs have arisen that at least support regional visioning and planning; in some cases, the policies now require such planning. While the policies do not, as a whole, call spe- cifically for the creation of TOD/joint development pro- jects and planning, they certainly implicate that style of development. The California Regional Blueprint Planning Pro- gram, administered by the state’s department of trans- portation, provides grants to MPOs to engage in sce- nario planning analyses that will lead to the articulation of “regional consensus and performance outcomes on a more efficient land use pattern that sup- ports improved mobility and reduces dependency on single-occupant vehicle trips,” while accommodating an adequate supply of housing, reducing impacts on natu- ral resources and air quality, and promoting a prosper- ous economy.103 Similar to the objectives of TOD, the 99 San Joaquin Valley Air Pollution Control District, On-Site Emission Reduction Mitigation Measures (2007), http://www.valleyair.org/ISR/ISROnSiteMeasures.htm. 100 SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT, 2007 ANNUAL REPORT ON THE DISTRICT’S INDIRECT SOURCE REVIEW PROGRAM 3 (2007), http://www.valleyair.org/ ISR/Documents/ISRAnnualReport2007.pdf. 101 Keith Bartholomew & Reid Ewing, Land Use- Transportation Scenarios and Future Vehicle Travel and Land Consumption: A Meta-Analysis, 75 J. AM. PLAN. ASS’N 13 (2009) (citations omitted). 102 Keith Bartholomew, Cities and Accessibility: The Potential for Carbon Reductions and the Need for National Leadership, 36 FORDHAM URB. L. J. 159, 195 (2009). 103 California Department of Transportation, Blueprint Program Goals (2008), http://calblueprint.dot.ca.gov/index_ files/ BP_Fact_Sheet.pdf. Blueprint program’s aims include the adoption of land- use planning policies that will “reduce dependency on auto trips by fostering a more efficient regional land use pattern that enables more walking, bicycling and tran- sit use.” 104 Using federal transportation planning and research funds, the department has allocated $5 million for Blueprint grants each year since 2005105 to fund TOD-related planning analyses in nine California re- gions.106 Integrated regional land use–transportation plan- ning in California has recently gotten a further boost by the passage of Senate Bill (SB) 375, which requires each MPO in the state to include a “sustainable communities strategy” as part of the region’s long-range transporta- tion systems plan. The strategy is required to include transportation and land use policies designed to meet a CO2 reduction target specified for the region by the state’s Air Resources Board. While not specifically aimed at promoting TOD, the purpose of SB 375 is widely understood to be a greater integration of land- use and transportation planning and policy to reduce reliance on automobile transportation and increase walking, bicycling, and transit use.107 The Oregon Transportation Planning Rule, adopted by the state’s Department of Land Conservation and Development in 1991, is a far-reaching administrative regulation articulating numerous standards for local government planning and zoning. Among the rule’s provisions is a mandate that MPOs in the state develop land use–transportation plans that will result in re- duced reliance on automobiles and “a significant in- crease in the share of trips made by alternative modes, including walking, bicycling, ridesharing and transit.”108 Key to achieving these reductions is a requirement that local governments amend local zoning ordinances to allow for TOD-style development projects in areas sur- rounding major transit stations.109 This provision is tar- geted at counteracting the widely observed local zoning prohibitions on many of the density, mixed-use, and street design attributes of TOD.110 104 California Department of Transportation, FY 2008/09 Regional Blueprint Planning Grant Application (2008), http:// calblueprint.dot.ca.gov/0809/2008-09_Blueprint_Application. pdf. 105 Id. 106 CALIFORNIA DEPARTMENT OF TRANSPORTATION, CALIFORNIA REGIONAL BLUEPRINT PLANNING PROGRAM REPORT TO JOINT LEGISLATIVE BUDGET COMMITTEE (2006), http://calblueprint.dot.ca.gov/0607_grant_info_files/BP_Report_ final.pdf. 107 See The Basics of SB 375: Transportation, Housing and Greenhouse Gases, Institute for Local Government, http://www.cacities.org/resource_files/27856.Basics%20of%20S B%20375.pdf. 108 OR. ADMIN. R. § 660-12-0035(5)(A), (C) (2009). 109 OR. ADMIN. R. § 660-12-0045(5)(a) (2009). 110 LEVINE, supra note 14, at 43–44; Michael Lewyn, New Urbanist Zoning for Dummies, 58 ALA. L. REV. 257, 263–64 (2006).

13 A framework for TOD-focused integrated regional planning has also been created in Nevada, where the state legislature in 1999 adopted the Southern Nevada Regional Planning Coalition Act. The Act creates a re- gional planning coalition for the Clark County–Las Ve- gas region comprised of the county commissioners and city council members of at least the three most populous cities in the county.111 The coalition is tasked with craft- ing a 20-year regional policy plan and implementing strategies112 that promote sustainable growth,113 maxi- mize use of existing infrastructure through infill and redevelopment in urban centers,114 and ensure the pro- vision of adequate public services concurrent with new development.115 To achieve these results, the statute requires, inter alia, the development of a land-use ele- ment that provides for mixed-use and transit-oriented development.116 The coalition is also required to study and develop incentives to facilitate the building of mixed-use, transit-oriented, and brownfield develop- ments.117 The coalition’s first policy plan, completed in 2001, contains a transportation element that promotes “land use patterns and development designs that will support regional mass transit” and reduces vehicle miles traveled (VMT) by “promoting mixed-use devel- opments and jobs/housing balance in each jurisdic- tion.”118 Now that a regional plan is established, plans and regulations of state agencies and local governments affecting lands within the region must be consistent with the provisions of the regional plan.119 B. Funding TOD and Joint Development 1. Funding for TOD/Joint Development-Related Infrastructure The most basic way statutory and regulatory law promotes TOD and joint development is through the creation of infrastructure investment programs that provide the basic hardware to support those types of development. Certainly, this includes providing the threshold facilities associated with transit services, but it also may include other types of public infrastructure, including streets and sewer and water facilities. Federal funding of joint development projects re- ceived a considerable boost with the amendments to the definition of “capital project” in SAFETEA-LU. Under prior law, capital projects could not include projects containing “commercial revenue-producing facilities,” 111 NEV. REV. STAT. § 278.02514 (2009). 112 NEV. REV. STAT. § 278.02528(1) (2009). 113 NEV. REV. STAT. § 278.02521(3)(b) (2009). 114 NEV. REV. STAT. § 278.025(4) (2009). 115 NEV. REV. STAT. § 278.025(5) (2009). 116 NEV. REV. STAT. § 278.02528(2)(b)(3)(I) (2009). 117 NEV. REV. STAT. § 278.02535(1)(b) (2009). 118 Southern Nevada Regional Planning Coalition, Southern Nevada Regional Policy Plan 20 (2001), http://www.snrpc.org/Reports/s_nevada_plan2.pdf. 119 NEV. REV. STAT. §§ 278.02549(2)(a), 278.02577 (2009). which severely limited the incorporation of private de- velopment into transit facilities.120 The current defini- tion, by contrast, includes transit improvements, in- cluding intercity bus and rail stations and terminals, that “incorporate private investment, including com- mercial and residential development.”121 The private development components must enhance the effective- ness of, and relate physically or functionally to, the transit system and provide a “fair share of revenue” for public transportation.122 According to the FTA guidance on this provision, federal funding can include the full range of development-related costs, including real es- tate acquisition, site preparation, and project develop- ment activities.123 Defining “capital project” in this way opens up funding opportunities for joint development projects from a number of sources, including the New Starts grants program,124 the urbanized area formula grants program,125 and the Surface Transportation Pro- gram under Title 23.126 The California Infrastructure and Economic Devel- opment Bank was created in 1994 by the Bergeson- Peace Infrastructure and Economic Development Bank Act127 to “promote economic revitalization, enable future development, and encourage a healthy climate for jobs.”128 Through its Infrastructure State Revolving Fund Program, the bank provides low-cost funding to public agencies for a wide range of public infrastructure projects, including streets, transit facilities, parks, and sewer and water facilities.129 The bank uses a 200-point ranking system to determine the allocation of program funds among qualifying applicants. TOD-related crite- ria appear in several locations in the ranking system, including in the Quality of Life/Community Amenities subcategory, which allocates up to 30 points for projects that “contribute to a greater use of public transit sys- tems.”130 Additionally, the first priority under the Land Use, Environmental Protection, Housing element is to 120 FTA Transit Program Changes, Authorized Funding Levels, and Implementation of SAFETEA-LU, 70 Fed. Reg. 71,950, 71,952 (Nov. 30, 2005). 121 49 U.S.C. § 5302(a)(1)(G) (2009). 122 Id. 123 Notice of Final Agency Guidance on the Eligibility of Joint Development Improvements Under Federal Transit Law, 72 Fed. Reg. 5788, 5792 (Feb. 7, 2007). 124 49 U.S.C. § 5309 (2009). 125 49 U.S.C. § 5307 (2009). 126 23 U.S.C. § 133(b)(2) (2009). 127 CAL. GOV’T CODE §§ 63000–63070 (2008). 128 California Infrastructure and Economic Development Bank, About Us Web site (2008), available at http://www.ibank.ca.gov/about_us.htm. 129 California Infrastructure and Economic Development Bank, Criteria, Priorities, and Guidelines for the Infrastructure State Revolving Fund Program 4–5 (2008), available at http://www.ibank.ca.gov/infrastructure_loans. htm. 130 Id.

14 “renew and maintain existing urban areas,”131 which is TOD-supportive, if not explicitly TOD-related. Simi- larly, additional criteria allocate points to projects that improve air quality and promote energy conservation.132 Although the program was originally appropriated $161 million by the state legislature, the program’s revolving fund and leverage promotion framework has allowed the bank to approve more than $380 million in total loans.133 Maryland’s Smart Growth Priority Funding Areas Act, adopted in 1997, is widely regarded as a hallmark in modern growth management policy. The primary purpose of the Act is to use state infrastructure spend- ing policy to help direct new development into existing population centers, while protecting the state’s scenic and agricultural lands.134 Under the Act, all “growth- related” infrastructure, housing, and economic devel- opment projects funded by state agencies135 are re- stricted to “priority funding areas” (PFAs),136 which the Act defines as incorporated municipalities, designated business development areas, enterprise zones, and other areas designated by counties using existing and planned development densities and the presence of sewer and water services.137 In a 2005 assessment of the Act, researchers found that approximately 70 percent of state funding for growth-related projects occurred within PFAs, while 75 percent of local funding was within PFAs.138 Although the Act does not prohibit de- velopment outside of PFAs, the restriction of state fund- ing for infrastructure is designed to dampen the eco- nomic viability for extra-PFA development projects. The Act also is not specifically focused on promoting TOD and TJD. However, by focusing infrastructure funding in already developed areas of the state, the Act assists in creating land use conditions conducive to transit. The Massachusetts Transit Oriented Development Bond Program, part of the state’s Commonwealth Capi- tal Funding Program, is intended to increase compact, mixed-use, walkable development close to transit sta- tions. To help accomplish this objective, the program 131 Id. 132 Id. 133 California Infrastructure and Economic Development Bank, Financing Facilities that Build Communities, http://www.cdfa.net/cdfa/cdfaweb.nsf/fbaad5956b2928b086256e fa005c5f78/553601b06f71136086257576005f97d2/$FILE/Stan_I -Bank%20CDFA-Sustainable.pdf. 134 Marie Howland & Jungyul Sohn, Has Maryland’s Priority Funding Areas Initiative Constrained the Expansion of Water and Sewer Investments?, 24 LAND USE POLICY 175 (2005). 135 MD. CODE ANN., STATE FIN. & PROC. § 5-7B-0-01(c)(1) (2008). 136 Id. § 5-7B-04(a). 137 MARYLAND OFFICE OF PLANNING, SMART GROWTH: DESIGNATING PRIORITY FUNDING AREAS 3 (1997), http://www.mdp.state.md.us/PDF/OurProducts/Publications/ ModelsGuidelines/pfa.pdf. 138 Howland & Sohn, supra note 134, at 184. provides financing for pedestrian improvements, cycling facilities, housing projects (25 percent of which must be affordable to middle- and low-income households), and parking facilities within 0.25 mi of commuter rail, sub- way, and bus rapid transit stations and ferry termi- nals.139 Funds are provided on a competitive basis, de- pending on the relative quality of the TOD in which the proposed project will be sited. Criteria include develop- ment densities, the degree to which land uses are mixed, the quality of the area’s pedestrian environment, and the amount of parking in the area.140 Award amounts include a $1 million maximum for pedestrian and cycling facilities and $2 million for parking facili- ties and housing projects.141 The Massachusetts TOD Bond program is part of a larger state effort to promote smart growth in central business districts, traditional town centers, around transit stops, or in other appropriate areas. Accompany- ing programs include a Smart Growth Incentive Zoning Program, a Smart Growth School Cost Reimbursement Program, a Priority Development Fund, and a Planning Assistance Grant Program.142 The San Diego Association of Governments’ (SANDAG) Smart Growth Incentive Program uses in- frastructure funding incentives to encourage coordi- nated regional planning to bring transit service, hous- ing, and employment together. Working together with area local governments, SANDAG developed a Smart Growth Concept Map143 indicating areas appropriate for smart growth funds. To be designated, an area must currently meet minimum density and transit service standards or have planning and zoning in place that will lead to such conditions.144 Although the program was initially funded using federal transportation en- hancement funds, current funding is provided by a por- tion of a local half-cent sales tax. Projects eligible for capital funding include public plazas, pedestrian and bicycle facilities, traffic calming features, and other related transportation projects.145 Areas that do not yet have the necessary planning and zoning in place can apply for planning grants to complete plan and code 139 Executive Office of Transportation and Public Works, TOD Infrastructure and Housing Support Program: TOD Program Guidelines 3 (2008), http://www.eot.state.ma.us/ todbond/downloads/ program_guidelines.pdf. 140 Id. at 9–10. 141 Id. at 7. 142 Id. at 3–4. 143 SANDAG, Regional Comprehensive Plan Smart Growth Concept Map (2008), http://www.sandag.org/programs/land_ use_and_regional_growth/comprehensive_land_use_and_ regional_growth_projects/RCP/region.pdf. 144 SANDAG, Pilot Smart Growth Incentive Program Guidelines 6–13, http://www.sandag.cog.ca.us/uploads/projectid/projectid_264_41 56.pdf. 145 SANDAG, Smart Growth Incentive Program: Guidelines and Call for Projects 4 (2008), http://www.sandag.org/uploads/projectid/projectid_340_8985. pdf.

15 changes that would qualify them for smart growth funding. SANDAG estimates that funding for the pro- gram will total $280 million through the year 2048.146 2. Funding for TOD/Joint Development-Related Housing and Infill Development While state funding programs for affordable housing are common, less common are programs designed to make housing and transportation affordable by focusing housing in TOD areas. Several progressive state pro- grams, nevertheless, are attempting to achieve these twin, related objectives, and they may represent the vanguard of a new direction in housing policy. One of the early programs of this type was developed by Metro, Portland, Oregon’s, regional government in 1998, to help foster the construction of planned TOD housing in the region. The agency expanded the pro- gram in 2004 to create a Transit-Oriented Development and Center Program. The innovative program helps to offset some of the costs of high-density TOD by purchas- ing TOD easements from developers and, in some cases, acquiring fee title to TOD-suitable lands and then sell- ing them to private developers at a reduced cost. These easements and land sales carry with them restrictive covenants that specify minimum development densities and/or building heights, mixed-land use requirements, pedestrian-friendly design features and amenities, and reduced parking ratios. The TOD projects funded through the program help to implement the metropoli- tan area’s long-range plan, the 2040 Growth Concept, which calls for a significant amount of the region’s growth to be concentrated in medium- to high-density mixed-use, walkable urban centers and corridors linked by high-quality transit service.147 The program began with a $3 million FTA grant that was facilitated by the agency’s 1997 joint development administrative regulations. By 2007, the program had expended more than $17 million to fund 29 projects around the region.148 These projects contain more than 2,500 units of new housing and 1.2 million sq ft of commercial space. Metro estimates that more than 3,000 new transit trips per day have been generated from these projects.149 The California Predevelopment Loan Fund, adminis- tered by the state’s Department of Housing and Com- munity Development, is a revolving loan fund that sup- ports the construction of affordable housing in the state. 146 SANDAG, TransNet Extension Ordinance and Expenditure Plan (Commission Ordinance 04-01) 8, http://www.sandag.cog.ca.us/uploads/projectid/projectid_341_88 06.pdf. 147 See App. C for a sample purchase agreement and ease- ment deed restriction from the Metro TOD and Centers Pro- gram. 148 METRO, TRANSIT-ORIENTED DEVELOPMENT AND CENTERS PROGRAM: ANNUAL REPORT 2, 12 (2007), http:// library.oregonmetro.gov/files/transit-oriented_development_ and_centers_2007_annual_report.pdf. 149 Id. at 17. The loans help provide “bridge” funding of costs that are typically incurred through the development stages leading up to actual construction of housing projects, including land acquisition, professional services, site preparation, permitting and entitlement, and infra- structure expenses.150 Entities eligible for these loan funds include government agencies and nonprofit or- ganizations that provide assisted housing for primarily low-income households.151 While the Department is re- quired to give priority to projects located in public tran- sit corridors when making general allocations of Prede- velopment Loan Fund monies,152 the legislature has specified that funds from the Jobs–Housing Balance Improvement Program must be used for projects located within 0.5 mi of an existing or planned transit station “where two or more mass transit modes, or one transit mode with three or more mass transit lines, are acces- sible to the public.”153 California’s Transit-Oriented Development Imple- mentation Program was established in 2006 by ballot initiative as part of the Housing and Emergency Shelter Trust Fund Act of 2006.154 The twin purposes of the Transit-Oriented Development Housing Fund, as the program is titled by the Department of Housing and Community Development, are to provide grants to local governments for TOD-related infrastructure and loans to help finance the construction of TOD-located hous- ing.155 The latter component requires that loan recipi- ents provide at least 15 percent of the housing units in a project at rates that are affordable for low- or very- low-income households and that the project be located no further than 0.5 mi from an existing transit sta- tion,156 or a future station that is part of a metropolitan or state transportation improvement program.157 While projects may include nonresidential components, in- cluding retail,158 the primary purpose of the fund is to provide gap financing for rental-housing projects and mortgage assistance funds for home-ownership pro- jects.159 To maximize the fund’s potential transit rider- 150 Id. § 50530.5(b). 151 Id. § 50531(b). 152 Id. § 50532(h)(1). The Department is also directed to give priority to projects in public transit corridors when distributing funding from the state’s Rental Housing Construction Program. Id. § 50737(f). “Public transit corridors” is defined, in both contexts, as areas within 0.25 mi of transit routes that receive average or higher levels of service (as determined by the relevant transit service provider). Id. § 50093.5. 153 Id. § 50545(a). 154 Id. § 53560. 155 Id. § 53562. 156 Id. § 53562(b); California Dept. of Housing and Community Development, TOD Housing Program: Second Round Guidelines 7 (2009), http://www.hcd.ca.gov/fa/tod/. 157 California Dept. of Housing and Community Development, supra note 156, at 5. 158 CAL. HEALTH & SAFETY CODE § 53562(b) (Deering 2008). 159 California Dept. of Housing and Community Development, supra note 156, at 1.

16 ship benefits, the Department limits funding to TOD areas within regions that have high levels of traffic congestion, high development densities, and high- quality transit service.160 The department allocates funds using a competitive point system that prioritizes projects according to their relative ability to increase transit ridership.161 The system assigns points for a number of features that have been empirically associ- ated with levels of transit ridership,162 including transit service frequency, the type of user information provided at the station, the population density of the surround- ing area, whether the area is designated for infill devel- opment and TOD in regional and local plans, the extent to which the project provides housing to moderate- and low-income households, the presence of transit- supportive retail and institutional uses, pedestrian- friendly street and site design features, and the amount and pricing of parking associated with the project.163 Recognizing the critical role that housing can play in maintaining the vitality of downtown areas and in pro- moting transit ridership,164 the California Downtown Rebound Capital Improvement Program provides loans for planning and constructing affordable residential infill and redevelopment projects in the state’s down- town areas and “the development of higher density housing adjacent to existing or planned mass transit stations.”165 The program, which was created by the state legislature in 2000, is currently not funded.166 The Illinois Business Location Efficiency Incentive Act supports both the location of businesses near tran- sit facilities and the provision of affordable workforce housing. The Act, which became law in 2007, provides a tax incentive to businesses that locate or relocate in areas requiring minimal or no new infrastructure in- vestments and that are proximate to housing that is affordable to the employees of that business or is acces- sible to mass transit.167 Businesses locating in areas not meeting these standards may still qualify if they de- velop an “employee housing or transportation remedia- tion plan” that will increase affordable housing or transportation options near the targeted location. Busi- nesses that meet these standards qualify for a business tax credit bonus for up to 10 percent more than they 160 Id. 161 Id. at 2. 162 Richard Lee & Robert Cervero, Research Basis for Proposed Criteria of the TOD Housing Program: The Effect of Housing Near Transit Stations on Vehicle Trip Rates and Transit Trip Generation—A Summary Review of Available Evidence (2007), see summary at http://www.hcd.ca.gov/fa/ tod/todresearch_sumappda102207.pdf. 163 California Dept. of Housing and Community Development, supra note 156, at 17–23. 164 CAL. HEALTH & SAFETY CODE § 50898 (Deering 2008). 165 Id. § 50898.1(a). 166 California Dept. of Housing and Community Development, Downtown Rebound Capital Improvement Program Web site, http://www.hcd.ca.gov/fa/drp/. 167 35 ILL. COMP. STAT. 11/5 (2009). would normally receive through other incentive pro- grams.168 Oregon’s Transit Supportive Multi-Unit Housing Property Tax Exemption Program allows cities and counties to provide property tax exemptions for afford- able multifamily housing constructed on vacant or un- derutilized sites in rail station areas.169 Projects that qualify may be exempt from ad valorem taxation for up to 10 years.170 C. Agency Authority to Sponsor and Invest in TOD/Joint Development Projects As outlined in TCRP 12, many states implicitly or explicitly prohibit transit agencies from directly engag- ing in or investing in development activities. In some states, the prohibitions are constitutionally based and, hence, difficult to overcome. Other states, however, have addressed actual or perceived barriers by passing legislation explicitly granting agencies TOD develop- ment authority. Examples of this type of authorization include the organic acts for the California transit districts, in par- ticular those for the San Jose,171 Sacramento,172 So- noma–Marin,173 and San Mateo174 districts, which ex- pressly authorize the agencies to engage in TOD projects. These authorizations typically include a defini- tion of TOD; for example, this provision from the Sac- ramento Regional Transit District Act: As used in this section, “transit-oriented joint develop- ment project” means a development project for commer- cial, residential, or mixed-use purposes that is under- taken in connection with existing, planned, or proposed transit facilities and is located one-fourth mile or less from the exterior boundary of the parcel on which that fa- cility is located.175 By including such specific definitions, these authori- zations can also be understood as limitations: real es- tate development projects not meeting the definition can be reasonably interpreted as being beyond the scope of the district’s authority. Another limitation is that these authorizations do not include authority to use eminent domain for TOD projects, and in some cases specifically prohibit it.176 A complementary provision of California law grants authority to all transit districts to enter into joint de- velopment agreements with public agencies, public utilities, or private entities for the development of real property, including the development of “commercial, 168 Id. 10/11(c) (2009). 169 OR. REV. STAT. § 307.600 (2007). 170 Id. § 307.612(1). 171 CAL. PUB. UTIL. CODE § 100130.5 (Deering 2008). 172 Id. § 102240.5. 173 Id. § 105087. 174 Id. § 103240.5. 175 Id. § 102240.5(a). 176 E.g., id. § 102240.5(d).